QUOTE(dc-x3 @ Nov 11 2010, 02:36 PM)

After reading this I have updated my console via USB method, and chucked in my back up copy of Fable 3 as a tester, of course it failed, to read the disk. Now I have been online for some time now and still no flag/ban code has appeared, so it appears the offline method seems to have worked this time around. :S
Did you use the xval program to check if you've been flagged? I never saw where it said you will be "banned", only flagged. As far as anyone is concerned, flagging consoles is the only known step this ap2.5 does as well as make the game "Fable 3" fail to boot.
Correct me if I'm wrong, I'm here to learn.